Good morning!
Corn and beans weaker, wheat mixed overnight... Corn and soybeans pulled back from strong gains the two previous days during overnight trade, while wheat pivoted around unchanged in choppy trade. As of 6:30 a.m. CT, corn futures are trading 1 to 2 cents lower, soybeans are 4 to 7 cents lower and wheat futures are a penny lower to 1 cent higher. The U.S. dollar index is modestly weaker, while front-month crude oil futures are tethered near unchanged.
Trump ratchets up tariff rhetoric with China, EU... President Donald Trump said his administration was discussing a 10% punitive duty on Chinese imports because fentanyl is being sent to the U.S. via Mexico and Canada and said the EU also has troubling trade surpluses with the United States. His latest comments underscored Trump’s longstanding desire for broader duties and a new Feb. 1 deadline for 25% tariffs against Canada and Mexico, as well as duties on China and the EU. China said it was willing to maintain communication with the U.S. to “properly handle differences and expand mutually beneficial cooperation.” It sought to promote stable and sustainable ties with the U.S., the foreign ministry said. Trump signed a trade memorandum ordering federal agencies to complete detailed reviews of several trade issues by April 1.
Trump pressures Canada and Mexico for early USMCA renegotiation... Trump is pushing for an early renegotiation of the U.S.-Mexico-Canada Agreement (USMCA), set for statutory review in 2026, by threatening to impose 25% tariffs on imports from Canada and Mexico as soon as Feb. 1. His administration aims to revise automotive rules to encourage U.S. manufacturing and address broader trade issues, the Wall Street Journal reported. Canadian officials are mulling retaliatory tariffs on up to $150 billion of U.S. products, depending on what Trump does. Canada has also threatened to add an export tax on the 4 million barrels a day of oil it sends to U.S. refiners, which could ultimately boost the cost of gasoline to U.S. customers. Mexican President Claudia Sheinbaum said she would emphasize Mexico’s sovereignty and independence and would respond to U.S. actions “step by step.” Trump plans to finalize his economic team before advancing these measures, with his nominees for key trade roles still awaiting confirmation. Handling the eventual USMCA renegotiations will be Howard Lutnick, Commerce secretary nominee, and Jamieson Greer, Trump’s nominee to be the U.S. Trade Representative. Trump signed a wide-ranging trade memorandum that instructed USTR to take the lead on reviewing the effect of the USMCA on workers, farmers and ranchers — and make recommendations on U.S. participation in the agreement.
Lagarde tells Europe to prepare for Trump tariffs... European Central Bank President Christine Lagarde urged Europe to prepare for potential trade tariffs under Trump. Speaking at the World Economic Forum in Davos, Switzerland, Lagarde praised Trump’s avoidance of immediate blanket tariffs, calling it a “smart approach,” but warned that selective tariffs may follow. Meanwhile, EU economy commissioner Valdis Dombrovskis pledged a “proportionate” response if the bloc’s interests are threatened.
Reuters: Brazilian soy shipments to China from five firms halted... China has stopped receiving Brazilian soybean shipments from five firms after cargoes did not meet phytosanitary requirements, two sources with direct knowledge of the matter told Reuters. From Jan. 8, shipments to China were suspended from Terra Roxa Comercio de Cereais, Olam Brasil and C.Vale Cooperativa Agroindustrial. On Jan. 14, Chinese customs suspended shipments from Cargill Agricola S A and ADM do Brasil. There were concerns after some cargoes had been found with chemical contamination, pests or insects, sources said. It was not clear how long the suspension would last, although traders said they expect it to be short-term.
S&P Global forecasts increase in corn plantings, reduced soybean acres... S&P Global Commodity Insights projects U.S. farmers will plant 93.5 million acres of corn in 2025, up 700,000 acres from its December forecast and 2.9 million acres more than last year. The firm projects soybean plantings at 83.3 million acres, down 700,000 acres from its December forecast and 3.8 million acres less than 2024.
Six senators reintroduced the Farm to Fly Act... The bill is aimed at accelerating the production and development of sustainable aviation fuel (SAF) through existing USDA programs. The bill was cosponsored by Sens. Jerry Moran (R-Kan.), Chuck Grassley (R-Iowa), Tammy Duckworth (D-Ill.), Pete Ricketts (R-Neb.), Amy Klobuchar (D-Minn.) and Joni Ernst (R-Iowa). The bill would require USDA to clarify that SAF is eligible for existing USDA bioenergy programs. It would encourage policymaking collaboration on aviation biofuels throughout USDA agency mission areas, increasing private sector partnerships. The act would affirm a common definition of sustainable aviation fuel for USDA purposes, enabling U.S. crops to contribute more effectively to aviation renewable fuels. The bill has support from the ag sector, biofuels producers and aviation industry.
China’s ‘comprehensive’ rural revitalization plan for 2024-27... China aims to achieve substantial progress in all-around rural revitalization and promote the modernization of agriculture and rural areas to a new stage by 2027, according to a plan issued by the Central Committee of the Communist Party of China and the State Council. China will vigorously implement the national soybean and oilseed production capacity enhancement program, state news agency Xinhua reported, citing a “comprehensive rural revitalization” plan issued by the government. Under the plan, which will be implemented from 2024 to 2027, China will increase support for grain production, enhance grain production subsidies, implement minimum purchase price policy and coordinate market-based grain purchasing and policy-oriented reserve storage. The country will also optimize market regulation mechanisms for live pigs, cotton and sugar, according to Xinhua. It will accelerate research on core seed technologies, strengthen the leading role of enterprises in technological innovation and cultivate large-scale seed industry enterprises.
China eases rules to boost stock market... China rolled out a basket of measures to stabilize its stock market, including plans to boost the amount pensions can invest in the nation’s listed companies. Beijing issued a directive to “steady the stock market, and clear bottlenecks for the introduction of mid-long term capital,” according to a notice posted by the China Securities Regulatory Commission. The securities watchdog also said the country will guide big state-owned insurers to raise A-share investment and prompt listed companies to increase their share repurchases. Mutual funds will be encouraged to issue more equity-focused fund products. Institutions including mutual funds, insurers, pensions, as well as wealth management units at banks will be allowed to participate in listed firms’ share placements as strategic investors. Authorities will guide listed firms to tap more into the central bank’s relending tool to boost share repurchases and stake increases. The government will extend the horizon of state-backed insurers’ performance evaluation mechanism and lower the weighting of annual return on assets.
India’s rice exports steady in 2024 despite restrictions... India exported 17.8 MMT of rice last year, just marginally lower than the 17.86 MMT shipped in 2023, despite export curbs put in place for most of the year by the government. Basmati rice exports in 2024 surged 16.3% to a record 5.7 MMT, while non-basmati shipments fell 6.9% to 12.1 MMT.
Georgia reports HPAI outbreak... A flock of 45,500 breeder chickens tested positive for highly pathogenic avian influenza (HPAI) last week in Elbert County, Georgia, near the border with South Carolina, USDA said. This was Georgia’s, the leading U.S. chicken producer, first confirmed case of the disease in a commercial operation. The USA Poultry & Egg Export Council said the outbreak was likely to trigger trade restrictions from major meat importers. It said Mexico the biggest importer of U.S. poultry products, will likely halt purchases from Georgia for about two to four weeks, until it revises the ban to apply to the county. Taiwan, the third-biggest importer of U.S. poultry, will block poultry imports from Georgia for six to eight months, the export council estimated. South Korea will likely impose a ban on Georgia’s poultry that should be lifted 28 days after the virus has been eliminated, a process that will likely take three to four months, the council said.
Packers better positioned on cattle purchases... Packers bought a large amount of cattle again last week, including some “with time,” according to cash sources. Packers are thought to be well positioned on near-term needs, reducing their urgency to actively bid for cattle. Of course, that’s what cash sources indicated last week, too, only to see cash prices jump to another record high. Cash negotiations will likely be pushed deep into the week, which is typical when there is a Cattle on Feed Report.
Cash hog index continues to rise... The CME lean hog index is up another 6 cents to $81.46 as of Jan. 20, the seventh straight daily gain. While prices have only risen $1.03 during that span, there are increasing signs a seasonal low is in place. The pork cutout fell $1.49 on Tuesday to $90.82 as all cuts except bellies declined. While the cutout is nearly $3.00 off its January low, prices are tethered in the low-$90.00 area.
Overnight demand news... South Korea purchased 136,000 MT of optional origin corn and 65,000 MT of feed wheat that can be sourced from optional origins excluding Russia, Argentina, Pakistan, Denmark and China. Japan tendered to buy 65,000 MT of feed wheat and 25,000 MT of feed barley from unspecified origins. Jordan tendered to buy up to 120,000 MT of optional origin milling wheat. Thailand tendered to buy 195,000 MT of optional origin feed wheat.
See ‘Policy Updates’ for late-breaking morning news updates... For updates to items in “First Thing Today” or any late-breaking morning news stories, check “Policy Updates” on www.profarmer.com.
Today’s reports
- 11:00 a.m. Cotton Ginnings — NASS
- 2:00 p.m. Broiler Hatchery — NASS